Today’s bitcoin mining takes 0,13 percent of world’s energy consumption. That’s more than countries like Nigeria with a population of 178 million people or Ireland. Approximately 29.05 TWh are „wasted“ for only one purpose: to produce virtual money.
„Only after the last tree has been cut down / Only after the last river has been poisoned / Only after the last fish has been caught / Then will you find that money cannot be eaten.“, a quote frequently linked with native Americans but originally from Alanis Obomsawin – a Canadian author who used the phrase in the book „Who is the Chairman of this Meeting“ in 1972 – hardly ever seemed so fitting like with the current bitcoin hype.
While scientists around the world are working on a more efficient use of energy to fight threats like global warming and climate change – issues which already cause each year tens of thousands of deaths by hurricanes or floods – smart money-makers push an increasing amount of energy into the creation of virtual cash. And an increasing value of bitcoin gets more and more people into this industry. Wired Magazine reports that if the growth of bitcoin-mining would continue like it did during the last month, it would consume all of today’s available energy in 2020. That’s in two years from now!
Jamie Dimon, CEO of JP Morgan one of world’s largest banks, said in several interviews that he considers bitcoin a „fraud“ and is predicting an rapid end of the movement once government intervention takes control over currencies again. Just recently he said at an CNBC interview that people who buy Bitcoins are stupid and will have to pay the price. Also Lloyd Blankfein, CEO of Goldman Sachs, seemed rather skeptical on the future of Bitcoin on several occasions.
Both man can be considered specialists and insiders when it comes to money business and none of them seems convinced. Despite the fact that both companies – as well JP Morgan as Goldman Sachs – use the underlying technology of Bitcoin – Blockchain – on broad scale.
Why don’t they support Bitcoin? Out of two major reasons: On the one hand they understand that bitcoin is not a currency but a sort of tradeable commodity which is heavily exposed to speculation since there is no regulation at all. On the other hand the money creation process is on of the most important and fragile issues of any government. It defines the buying power of the population, the lending power of banks and therefore liquify of markets and a lot of other essential parts of any working economy. Governments cannot allow to give this power out of hand and therefore it’s a matter of time that Bitcoin will be shut down.
So somehow we’ve ended up in the current situation where Bitcoin eats up world’s energy to establish a shadow currency frequently used for shady businesses that is not supported by world’s major banks. The probability that this „currency“ will be shut down by government is very high and therefore it value might go to zero and all the energy was wasted for nothing! Leaving a huge effect on climate and human society.
For me it’s not a question if this bubble will burst but the question is when it will burst! And like any bursting bubble it will leave many people with great damage. In this particular case the damage might not just be an economic disaster – like the internet-bubble in 2001 or the subprime-bubble in 2007 – but also an ecological disaster if the drain of energy will last too long.